What is the duration of the post-term covenant not to compete for an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.1 Covenant Not To Compete. Upon assignment, termination or expiration (without renewal) of this Agreement, you (and your Owners) agree that for a period of two (2) years, commencing on the effective date of assignment, termination or expiration, or the date on which you begin complying with the covenants herein, whichever is later, you (and your Owners) will not:
- (a) have any direct or indirect interest as an owner, investor, partner, director, officer, employee, consultant, representative or agent, or in any other capacity, in (a) any restaurant business selling products or services substantially similar to a Papa Ray's Pizza Restaurant concept then being offered by us (except other Papa Ray's Pizza Restaurants you are operating pursuant to franchise agreements with us), which is located (i) within ten (10) miles of the Premises of your Papa Ray's Pizza Restaurant or (i) within ten (10) miles of the premises of any other Papa Ray's Pizza Restaurant,
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if the franchise agreement is assigned, terminated, or expires without renewal, the franchisee and their owners agree to a post-term covenant not to compete for two years. This two-year period starts from the effective date of the assignment, termination, or expiration, or from the date the franchisee begins complying with the covenants, whichever is later.
This non-compete agreement restricts the franchisee and their owners from having any direct or indirect interest in a restaurant business selling similar products or services to Aw's Papa Ray's Pizza Restaurant concept. This restriction applies to roles such as owner, investor, partner, director, officer, employee, consultant, representative, or agent. The restricted area includes locations within ten miles of the franchisee's Papa Ray's Pizza Restaurant or any other Papa Ray's Pizza Restaurant.
Additionally, the franchisee is prohibited from engaging in activities such as diverting customers from their former Aw location to a competitive business, employing individuals employed by Aw or its affiliates, and soliciting or selling to former customers of their Papa Ray's Pizza Restaurant. These restrictions are designed to protect Aw's market share, confidential information, and relationships with customers and employees after the franchise agreement ends. Franchisees should be aware of these limitations and consider them when planning their business activities after leaving the Aw system.